The Uttarakhand State Consumer Disputes Redressal Commission has ordered State Bank of India (SBI) to pay Rs 2 lakh insurance cover to the husband of a deceased woman enrolled under the Pradhan Mantri Suraksha Bima Yojana (PMSBY).
Earlier, the district commission had also given the same order but SBI was not satisfied with the order and filed case in state commission.
The district commission had directed the bank to pay the insured amount of Rs 2 lakh along with 6% annual interest from March 12, 2019, and litigation expenses of Rs 5,000 to complainant Govind Singh Rana.
“There was a clear deficiency in service on the part of the bank by not deducting the premium amount of Rs 12 from the account of the deceased on May 27, 2017, despite sufficient balance in her account,” the commission said on May 19 while dismissing SBI’s appeal.
What is the case all about?
According to the case records, Govind Singh Rana’s wife, Kavita Devi, had enrolled under PMSBY through SBI on May 29, 2015, by paying an annual premium of Rs 12.
The scheme provided accidental insurance coverage of Rs 2 lakh. The premium for 2015-16 and 2016-17 was successfully deducted from her SBI savings account.
However, for the year 2017-18, the premium was not deducted by the bank even though there was enough balance in the account.
Kavita Devi suffered fatal injuries on February 17, 2018, while cutting grass in a forest area. She was admitted to AIIMS Rishikesh on the same day and later died during treatment on March 8, 2018.
After her death, her husband applied for the insurance amount under PMSBY, but the claim was rejected because the premium for that year was not paid.
SBI said that the deceased was not insured on the date of death because the premium for 2017-18 had not been deducted. The bank also argued that it could not deduct the amount without the account holder’s consent.
However, the commission did not accept the bank’s argument. Referring to the account records, it observed that there was enough balance in the account to deduct the Rs 12 premium.
The commission also noted a handwritten remark in the account statement claiming that the account had become dormant and that fresh KYC and a physical branch visit were required before any debit transaction could be made.
However, the commission found the note unreliable because it had no signature, seal, or date.
Importantly, the commission said SBI failed to provide any evidence showing that the deceased had been informed about the need for fresh KYC or a branch visit.
The commission further noted that the complainant had specifically stated that an application regarding deduction of the premium had been submitted to the bank on July 11, 2018.
Dismissing the appeal, the commission directed SBI to pay Rs 2 lakh along with 6% annual interest from March 12, 2019, till payment, and Rs 5,000 towards litigation costs.
But a big question still remains – Can Banks deduct premium of PMSBY and other government schemes without consent of customers?
We inquired about it and the answer was written in the application form of PMSBY. The application form has a paragraph mentioning that premium should be deducted each year.
The customer submits an undertaking that – I hereby authorize you to debit my Account with your Branch with Rs. 12/- (Rupees twelve only), towards premium of accidental insurance cover of Rs two lakhs under PMSBY (claim payable in case of death or permanent disability due to accident). I further authorize you to deduct in future after 25th May and not later than on 1st of June every year until further instructions, an amount of Rs.12/- (Rupees twelve only), or any amount as decided from time to time, which may be intimated immediately if and when revised, towards renewal of coverage under the scheme.
Thus, as per the application form, SBI should have deducted the premium.
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